Goldman Sachs, one of the major US banks, has turned heads by making an over-the-top (OTC) cryptocurrency transaction. The bank bought an OTC bitcoin non-deliverable option (NDO) from Galaxy Digital. In simple words, Goldman Sachs bought a contract betting on the future price of the popular crypto than buying the bitcoin itself.
Max Minton, the head of digital assets Asia Pacific for Goldman Sachs, highlighted this as an important development in the bank’s digital assets capabilities. Damien Vanderwilt, the co-president and head of global markets at Galaxy Digital, said this shows the crypto investment firm’s commitment and strengthening relationship with Goldman Sachs. He said the crypto transaction will open the door for other banks looking at OTC as a conduit for trading digital assets.
Moreover, this is regarded as a notable step in the development of crypto markets for institutional investors.
Goldman Sachs has been very much keen but hesitant on cryptocurrency. It had announced plans to start a crypto trading desk in 2018, but had shelved the idea and eventually opened it in 2021. Goldman Sachs is said to be taking on great risk by acting as a principal in the transactions.
Analysts describe options trading as a very popular form of investing in cryptocurrency. Traders have to buy and sell contracts that bet on the prices of crypto assets instead of actually purchasing them. There is a huge market for this. About $16.5 billion was traded in the last 24-hours on Binance on the spot market.
